William Blair sees flat CarMax stock used unit comps in May quarter

The key signal is not just that used-auto demand is holding up, but that margin dispersion is widening between asset-light retail execution and balance-sheet-driven finance income. KMX looks like the cleaner operating story: even if unit growth is muted, the combination of SG&A leverage and better-than-feared comps can support earnings stability, while the market is likely still too focused on near-term gross margin pressure rather than the path to higher conversion in a slower rate environment. The second-order effect is that any confidence in a flat-to-positive used market helps channel share away from weaker local independents and keeps wholesale inventory values from deteriorating further.

CVNA remains the higher-beta expression, but the bull case is increasingly about operating leverage plus adjacent monetization, not just unit growth. If reconditioning costs are peaking while volumes continue to compound, the next leg of upside comes from margin normalization, not top-line surprise, which means the stock can rerate sharply if management simply avoids a guide-down. ROOT is the sleeper winner: embedded distribution through a dominant auto-commerce platform can turn a single-partnership win into a durable policy annuity, and the market may be underestimating how quickly this can scale if attach rates improve without incremental acquisition spend.

Barclays’ macro caution matters more for the pace of upside than the direction: softer industry sales can compress near-term beats, but it also raises the value of market-share gains for CVNA and the premium placed on KMX’s cost discipline. The contrarian risk is that the consensus may be over-penalizing the retailers for cyclical auto demand while underpricing the structural improvement in efficiency and monetization. If used pricing weakens again over the next 1-2 quarters, KMX’s finance-income cushion is the first thing to break, but if rates stay sticky and wholesale supply remains tight, both names can outperform on multiple expansion rather than explosive unit growth.